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Inflation and Deflation

Inflation and Deflation. Luis Delgado Per. 3 Lucas Lopez Trevor Harvey. Inflation:. Demand Cost Expansion Of Money Supply. Inflation:. Demand: It’s like the pull of the operation.

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Inflation and Deflation

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  1. Inflation and Deflation Luis Delgado Per. 3 Lucas Lopez Trevor Harvey

  2. Inflation: • Demand • Cost • Expansion Of Money Supply

  3. Inflation: • Demand: • It’s like the pull of the operation. • Demand increases so much it out strips supply. If product sells of current price they’ll sell out without much profit. They enjoy raising prices. • This happens with growing economy, people feel confident and demand too much. If in under limit is good over bad inflation target.

  4. Inflation: • Cost: • The opposite of demand, “the push” • Supply shortage and much demand = RAISED PRICES • Wage inflation contribute. • Natural disasters, depletion of natural resources • Regulation and Taxation

  5. Inflation: • Expansion of Money Supply: • MORE MONEY = HIGHER PRICES AND DOLLAR WORTH LESS.

  6. Deflation: • In economics, deflation is a decrease in the general price level of goods and services. • Deflation occurs when the inflation rate falls below 0% (a negative inflation rate).

  7. DEFLATION: • Inflation reduces the real value of money over time; conversely, deflation INCREASESthe real value of money. • This allows one to buy more goods with the same amount of moneyover time.

  8. The end… almost. • The slower growth will then lead to lower inflation. Higher interest rates reduce consumer spending because: • Increased interest rates increase the cost of borrowing, discouraging consumers from borrowing and spending. • Increased interest rates make it more attractive to save money. • Increased interest rates reduce the disposable income of those with mortgages. • Higher interest rates increased the value of the exchange rate leading to lower exports and more imports. • Thank You For Your Time, From • Luis Delgado - Lucas Lopez • Trevor Harvey

  9. CITATIONS: • "Policies To Reduce Inflation - Economics Blog." Economics Help - Helping to Simplify Economics. N.p., n.d. Web. 8 May 2013. <http://www.economicshelp.org/blog/42/inflation/economic-policies-to-reduce-inflation/>. • century, the end of the 19th, and the deflation ended. "Deflation - Wikipedia, the free encyclopedia." Wikipedia, the free encyclopedia. N.p., n.d. Web. 8 May 2013. <http://en.wikipedia.org/wiki/Deflation>. • "Deflation Definition | Investopedia." Investopedia - Educating the world about finance. N.p., n.d. Web. 8 May 2013. <http://www.investopedia.com/terms/d/defla

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